NEW YORK (TheStreet) -- Green Dot (GDOT - Get Report) was gaining 12.7% to $21.20 Wednesday after announcing a partnership with Walmart (WMT - Get Report) to offer checking accounts to the retailer's customers.
The new checking accounts, called GoBank, offer customers MasterCard (MA - Get Report) debit cards with no overdraft fees, minimum balance fees, or monthly fees with qualifying direct deposits. To start an account Walmart customers buy a $2.95 starter kit which includes a starter debit card customers can use until their personalized card arrives.
"Walmart customers want easier ways to manage their everyday finances and increasingly feel they just aren't getting value from traditional banking because of high fees," Daniel Eckert, senior vice president of services for Walmart U.S., said in a statement. "Adding the GoBank checking account to our shelves means our customers will have exclusive access to one of the most affordable, inclusive and easy-to-use checking accounts in the industry."
Shares of Walmart were gaining 1.5% to $76.75 following the announcement.
TheStreet Ratings team rates GREEN DOT CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate GREEN DOT CORP (GDOT) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GDOT's revenue growth has slightly outpaced the industry average of 0.1%. Since the same quarter one year prior, revenues slightly increased by 4.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- GDOT has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.39, which illustrates the ability to avoid short-term cash problems.
- GREEN DOT CORP has improved earnings per share by 24.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GREEN DOT CORP reported lower earnings of $0.77 versus $1.03 in the prior year. This year, the market expects an improvement in earnings ($1.41 versus $0.77).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Consumer Finance industry and the overall market, GREEN DOT CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- Net operating cash flow has significantly decreased to $24.68 million or 60.58% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: GDOT Ratings Report